Allstate Files $796,000 Insurance Fraud Case In New York

Allstate Insurance is seeking to recover more than $796,000 from 18 New York-area Defendants. The lawsuit, filed following an investigation by Allstate’s Special Investigative Unit, seeks reimbursement for personal injury protection benefits Allstate paid on behalf of its customers during the timeframe specified in the lawsuit. The complaint, filed in Federal District Court as a Declaratory Judgment/Recovery action, alleges that two medical doctors, along with four laypersons and five lay entities, illegally owned and controlled two professional medical corporations allegedly owned on paper by a medical doctor and used them to submit fraudulent billing to the insurer.

In addition, two other individuals and three other companies were also named as being part of the overall scheme to submit fraudulent bills. Allstate contends in the lawsuit that professional service corporations were actually owned and controlled by laypersons, rather than by licensed medical professionals. In addition, it’s alleged that the Defendants submitted claims for services that were performed by independent contractors in violation of the No-Fault Law. The suit contends that Kingscare Medical, P.C. and FOT Hamilton Medical, P.C. were fraudulently incorporated through a scheme using the name of two licensed medical doctors. However, those medical entities were actually run by four laypersons. Neither of those four individuals is a medical doctor. There are also five management companies that were utilized to effectuate this scheme.

Included in this lawsuit are claims for unjust enrichment against the Defendants. The lawsuit was filed following an investigation by Allstate’s Special Investigative Unit and seeks reimbursement for personal injury protection benefits Allstate paid on behalf of its customers during timeframes specified in the lawsuit. Allstate says the lawsuit filed was the latest in a string of actions taken by the insurer to protect consumers from these and similar activities. Interestingly, since 2003, Allstate has filed 39 fraud lawsuits in New York, seeking nearly $204 million dollars in damages. As I have stated before, it’s always good to see a huge corporation, which believes it has been wronged, having faith in our judicial system.